Oregon accuses foster care provider of 'plundering' $2 million in state funds

The Oregon Department of Justice has sued a woman whose foster care agency endured withering scrutiny from lawmakers last month, alleging a years-long plot involving three charities and the misspending of at least $2 million in state funds.

In a complaint filed Wednesday in Marion County Circuit Court, state officials accuse Mary Ayala of West Linn of using two nonprofits, the Alfred Yaun Child Care Centers and the Albina Women's League Foundation, to "facilitate her plundering of assets" from her Northeast Portland foster care provider, Give Us This Day.

Court documents say Ayala, also known as Mary Holden, had "essentially exclusive and unfettered" financial control of the three organizations. Ayala used that power, a state financial investigator alleged, to buy property ($100,000), remodel and furnish her home ($213,000), and pay for trips, meals, clothes and beauty expenses including cosmetic surgery ($249,800).

The state's financial review found 76 cash transactions worth $257,000 that benefited Ayala. It also found Give Us This Day had passed 450 bad checks from 2010 through 2015. Investigator Kris Kalanges said Give Us This Day failed to keep a ledger and that Ayala "failed to maintain or provide even minimal accounting records" tracking her spending.

The court filings come amid ongoing questions about how well Oregon cares for thousands of foster children and whether the state spends enough to provide adequate oversight. In the end, the documents allege, the foster children served through Give Us This Day and funded by the Department of Human Services, were left to suffer "severe consequences."

Ayala's "excessive and unauthorized personal use" of Give Us This Day's funds, "coupled with her failure to repay those funds, severely impacted the ability of [Give Us This Day] to carry out fully its mission to care for foster children," Kalanges wrote.

In testimony last month before the Senate's human services committee, a former Give Us This Day employee said children at one group home went without groceries, grooming products, clean sheets or mattresses. The employee, Rachel Rosas, also said kids and staffers dealt with mold and rodents.

Justice officials have been investigating Ayala and her organizations since 2012. Willamette Week first reported on Give Us This Day's troubles in September.

Ayala, contacted Thursday by The Oregonian/OregonLive, said she hadn't yet read the court documents or consulted an attorney.

"I don't know anything about that," she said.

Asked about the accusations, though, she said they were "totally not true" and said she had been owed at least $1 million since taking over Give Us This Day in 1999. She said she often worked for free and would go months without being paid, even mortgaging her house to keep Give Us This Day afloat.

Ayala closed Give Us This Day as part of a settlement with the Justice Department. The Department of Human Services stopped referring children to the provider, citing the justice investigation, after Willamette Week finished its reporting.

On its last day of operation, Sept. 30, Give Us This Day received a final check from the Department of Human Services for $5,092. Court papers say Ayala, later that day, wrote herself a $5,000 check and cashed it.

"She left [Give Us This Day] with less than $900 in the bank," court records say, despite knowing the provider "owed foster parents tens of thousands of dollars for their services."

Ayala acknowledged the withdrawal but didn't say what she used the money for. She insisted she did nothing wrong. She accused state officials of targeting her over complaints about racism.

"I'm pretty much a pauper myself," she said. "Now I've been made this scapegoat. That's just the way it is."

Besides Ayala, the complaint filed Wednesday names as defendants the two other nonprofits Ayala ran.

It also names four defendants identified as board members for the Alfred Yaun Child Care Centers: Mercedes Garcia, Delores Moore, Jacqueline Williams and Ayala's mother, Flora Judon. And it names two members of the Albina Women's League Foundation: Henry McDowell and Opal Strong.

The complaint says the members "allowed" Ayala to "exploit these charities for personal gain" and operate without any "procedures necessary to ensure that charities operate for the public benefit."

Ayala, it alleges, ordered the Yaun nonprofit to let Give Us This Day use a house on Northeast Rodney Avenue for $1 a year. Documents say the Yaun center has provided no services to children or other charitable programs since 1997.

The Albina foundation similarly stopped running charity programs since Ayala took over in 2012, court files say. Ayala, acting as head of the foundation, leased office space on Northeast Killingsworth Street to Give Us This Day. But the group "has made no effort to collect rent." The complaint says Ayala has since moved a restaurant into the space formerly held by Give Us This Day.

Before Ayala agreed to close Give Us This Day, the complaint says, Ayala worked with a woman named Alesha Walker to create a for-profit business, Trinity of Oregon, that would continue serving foster children at the Rodney property. Investigators also accuse Ayala of retaining control of the remaining nonprofits.

Kalanges, the state financial investigator, said Ayala's associates told foster parents who hadn't been paid before Give Us This Day's dissolution to "seek payment elsewhere." Others told the Justice Department that they'd been told to tell the Department of Human Services they wanted to work with Trinity.

The state is demanding that Ayala and the board members pay damages that amount to what was lost by Give Us This Day and the two other nonprofits. They also want to prevent the defendants from holding jobs or volunteer positions where they handle money or oversee finances.

Attorneys also want both remaining charities to be taken over by receivers and dissolved. The state has asked for a restraining order in the meantime, to keep Ayala "from dissipating charitable assets while this action is pending."